Certara Inc (CERT)
Interest coverage
Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
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Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -5,877 | -19,575 | -60,433 | -39,693 | -32,227 | -12,100 | 49,320 | 41,941 | 40,971 | 42,072 | 28,254 | 26,512 | 25,045 | -44,110 | -36,500 | -27,903 | -24,885 | 33,010 | 33,530 | 25,076 |
Interest expense (ttm) | US$ in thousands | 21,520 | 22,386 | 23,102 | 23,192 | 22,916 | 22,491 | 21,809 | 20,020 | 17,773 | 15,616 | 13,684 | 16,137 | 16,837 | 19,035 | 21,675 | 22,366 | 25,296 | 26,803 | 20,874 | 13,851 |
Interest coverage | -0.27 | -0.87 | -2.62 | -1.71 | -1.41 | -0.54 | 2.26 | 2.09 | 2.31 | 2.69 | 2.06 | 1.64 | 1.49 | -2.32 | -1.68 | -1.25 | -0.98 | 1.23 | 1.61 | 1.81 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-5,877K ÷ $21,520K
= -0.27
The interest coverage ratio of Certara Inc has shown fluctuations over the period from March 31, 2020, to December 31, 2024. Initially, the company had a moderate interest coverage ratio around 1.5 to 2. However, there were some periods, particularly in the latter half of 2020 and throughout 2021, where the ratio turned negative, indicating that the company's operating income was insufficient to cover its interest expenses during those periods.
Subsequently, there was a gradual improvement in the interest coverage ratio in 2022 and 2023, reaching levels above 2, which is generally considered healthy. However, the ratio saw a decline again in the following periods, dropping below 0. This suggests that Certara Inc may have faced challenges in generating enough profit to cover its interest payments during those times.
Overall, the fluctuating trend in Certara Inc's interest coverage ratio indicates varying levels of financial risk related to the company's ability to meet its interest obligations with its operating income. Continuous monitoring and management of the company's financial performance and debt levels are crucial to ensure stability and financial health in the long term.
Peer comparison
Dec 31, 2024